Thursday, August 20, 2009

Apples versus Berries

Because professional services advisors are among the most active mobile phone users, in June 2009 we asked a random sample of professional services firm partners about their experiences using Smartphones. We also spoke with a couple of Smartphone experts to get some additional insights. A Smartphone is a fancy word for a multipurpose mobile phone offering advanced capabilities and exceptional computing power. know, an iPhone or a BlackBerry or one of the multitude of devices now on the market. We were especially interested in how professional are using their Smartphone as a business development tool.

“Where, not long ago, the Smartphone was considered a business tool only for large enterprises and their senior executives, these devices are now broadly available and highly affordable,” said Bryan Melton who leads Cbeyond’s Mobile Product Management efforts. “And this prevalence of Smartphones is especially valuable for the small businesses that we serve as they regularly integrate these devices into both their personal and professional lives. Smartphones help our small business customers compete head on with the Goliaths,” Melton said.

Communications Table Stakes, Applications Advantage

Here’s what we learned from the professionals we surveyed…Smartphones are table stakes when used solely as portable e-mail and calendaring tools. Right now, they aren’t heavily used as points of access to customer relationship management systems back in the office and they’re even less frequently used for other business applications. For anything beyond utility business communications, they’re as often used as personal devices as business ones. The iPhone’s appeal further muddies the water between Smartphone as business tool versus personal one. While we believe that Smartphones might provide some competitive advantage, it will only come with a firm-wide push to implement client-focused applications – not through traditional Smartphone utility communication features. Still, any advantage is likely to require the professional services firm to be an early adopter of applications that enable its advisors to clearly, significantly and almost instantly benefit clients.

Device Wars

Here are some of the details we discovered: Most of the professionals who responded (over 55% ) felt that a BlackBerry device is best suited for professional services firms and advisors and that’s what they currently use. 30% thought the iPhone was more suitable and use that device – although some complained about the AT&T iPhone network availability and performance. And, the rest leaned towards Windows Mobile devices. The primary rationale among BlackBerry users was pragmatism and needs with regard to e-mail – keyboard manipulation and integration. The primary rationale among iPhone users was ease of use and accessibility of the Web and applications beyond e-mail.

BlackBerry users praised their Smartphone for its business communication utility:

• “Better e-mail device, the typing on the others is much harder.”
• “Best for corporate supported e-mail.”
• “Syncs with Outlook; real keyboard for e-mail.”
• “Superior email capabilities and integration with Exchange”
• “For me, it's because I am using it more for communication than for web browsing. I think it is a little easier for email.”
• “Industry leader, secure, it has business applications, so I can view PPT as well as Word docs, the Storm is really easy to use.”

iPhone users preferred their Smartphone for its usability and applications beyond e-mail:

• “Ease of use, superior functionality”
• “I find it easiest to use”
• “BlackBerry seems to have a corner on the market, however, I've had no issues with my iPhone, despite it seemingly being an entertainment vehicle first and professional tool second, which seems to be the opposite of BlackBerry.”
• “Access to internet is better.”
• “The best technology and applications.”
• “Numerous applications in one device.”
• “It seems to be the device with the most friendly navigation tools and easy to access applications.”

Maury Margol is a wireless industry expert, President and Co-founder of the Wireless Technology Forum and Founder at Productiv Wireless which trains corporate users how to make the most of their Smartphone usage. Margol put it like this, “iPhone is the best output device. Blackberry is the best input device.”

Tim Wise, co-founder of the communications technology & strategy consulting firm Advocate Networks, draws a sharper distinction, “For the power mobile users, the iPhone is inferior from a business perspective given the coverage and network quality issues and the more time consuming interface. However, from a future potential, iPhone has a lot of potential.”

One wildcard in the Smartphone war is the Palm Pre which first went on-sale in June 2009. Some see this new device as blending the best of both Blackberry and iPhone worlds but the Pre’s late start, limited application-base and distribution on the Sprint network make the climb much harder for Palm within the professional services market. Palm is first launching a paid-App store in September 2009 so the Pre’s late start will be further hindered in the professional markets by a dearth of business applications available even later. Further, Palm has placed its initial distribution bet with Sprint whose reputation and channels have suffered relative to Verizon and AT&T. For instance, when Sprint released second quarter 2009 results, it revealed the defection of over 250,000 subscribers and a net loss of $384 million. Instead of demonstrating a commitment to selling its services to the professional services space, Sprint has invested in the prepaid cellular business which seems to serve a broader, mass market, lower price/lower margin market. Because of these factors, we believe, Palm Pre will have difficultly gaining traction in the professional services market. According to Tim Wise, “After almost 3 months, we are seeing limited penetration and wins by Sprint with the Palm Pre in the enterprise market. The primary factor appears to be the historical perceived coverage gap Sprint has had compared to AT&T and Verizon Wireless.”

Sorry folks…Responsiveness is NOT an Advantage…It’s a Must

More than half of respondents (54%) saw no business development or client management competitive advantage accruing to them because of their Smartphone usage. While 46% indicated some advantage from using their Smartphone, a look at their reasons for saying so reveal little true advantage. Those who attributed advantage to Smartphone usage suggested the benefit came from increasing their client responsiveness. “The devices clearly provide a time advantage – especially for the more mobile professionals,” said Tim Wise.

However, as more professionals are equipped with Smartphones, any advantage is diminished. Survey respondents shared views such as:

• “It has become required, so I would not say it gives an advantage any longer.”
• “They are a commodity in the business place at this point.”
• “Most competitors have them too.”
• “NO advantage. Everyone has it.”

Further, our ongoing investigations into competitive advantages for professional services firms indicate that “responsiveness” is a vague, hackneyed term and that, while clients expect professionals to respond quickly to their communications, responsiveness is a hygiene factor. By that we mean if responsiveness is missing from a client advisor relationship, the client will be significantly dissatisfied with the advisor. However, responsiveness is not a motivator which compels a client to use you more. So, we fail to see how a Smartphone – as currently used by our professional services firm respondents – provides an advantage. Right now, the Smartphone is a utility and a requirement but without a new compelling application, it is not a differentiator.

Mixing Business and Personal

This surprised us: 67% of our professional services advisor respondents own the Smartphone themselves. So, individual professionals are largely making their own purchasing decisions regarding which Smartphone they use. Even when the firm dictated Smartphone usage, many of our respondents were planning on buying their preferred device anyway…especially when the firm’s device was a BlackBerry, many professionals were planning on their own iPhone purchase.

Also, far more professionals had downloaded a personal productivity tool to their Smartphone than had loaded a business applications provided by their firm. Nearly 70% of professionals had downloaded a personal productivity application such as GPS, social networking tools, games and restaurant finders. About 50% used the multimedia capabilities of their Smartphone – mostly the music/mp3 functionality of their device - and nearly as many used the device’s video capability.

“The best application for professional services firms are mobile access to social networking sites such as LinkedIn, Plaxo and others as well as time and billing applications,” said Tim Wise. “Other application integration is limited and primarily related to personal interests.”

The fact is, there may no longer be a distinction between devices used for work versus personal purposes. “There is no line between business and personal use anymore. Professionals are “always on” whether they are the office or at the kid’s soccer game,” said Margol.

No Strings Business Development Opportunity

We asked professionals, “In addition to email, calendar, contact details and Internet what office based applications, systems or databases has your firm made accessible by Smartphone?” The largest single response was “none.” We asked what professionals “wish list functionality” items would be for their Smartphones and the primary response related to CRM system access with a scattering of forward thinkers who replied with apps such as “Live video phone for virtual “in-person” meetings from anywhere.”

These “wish list” apps are interesting and basic and, in actuality, require little to put into effect.

While professionals may perceive little competitive differentiation from their Smartphone usage, it is quite possible that no one has shown them where the advantage lay nor have they experienced the breadth of applications already available.

“Most firms spend a significant amount of money deploying Smartphones and little on training the user,” Margol told us. Many more potentially helpful Smartphone applications are already available for use than any of us have time to find and master on our own. Many are already loaded on the devices. And, thousands more are available on the devices’ App Stores. The Blackberry application store has at least 2500 applications with still more available outside of Blackberry’s confines. iPhone has 65,000 apps available on its store. Blackberry may have a larger installed-based of phones among professionals, but iPhone has been far more aggressive in touting the availability of its apps. A recent full page four color advertisement on the back cover of The New York Times Magazine touted twelve seemingly simple apps to help you run your practice. The new battleground among Smartphone providers is the app and this will certainly hold true for those serving the professional services market. "I definitely see the wireless industry moving towards more professional services applications on the Smartphone,” said Cbeyond’s Bryan Melton.

Many of the seemingly “Buck Rogers” style apps like video phone are already available now, albeit it in somewhat raw form. For instance, Qik is an app which enables mobile live video sharing. During a recent lunch with our friend, Fred Perpall of Beck, he flipped his iPhone on its side and showed us a crisp video showcasing Beck’s recent projects…no special add-on required.

On the personal front, you can already watch TV on your Smartphone. The other day, I kept my seven year old daughter occupied in a dreadfully boring waiting room with an episode of the Jonas Brothers streaming on my phone. Apps like Slingbox let you watch live TV and others like Iheartradio, Slacker Radio and Pandora let you listen to existing radio stations or your own custom music radio station from your Smartphone. So, certainly there are or will soon be services streaming professional development content such as rainmaking tips to Smartphones. Brush up on your business development skills immediately prior to your new prospect meeting with a little refresher video or audiocast downloaded on the spot.

A few of the other current Smartphone applications and content already available include:

Vlingo which provides voice recognition for mobile applications like searching Google without the keyboard.
Google maps and directions tailored for the Smartphone
Goog-411 Free phone information services
Forbes reader – no subscription required
Wall Street Journal reader – no subscription required
• Instant messaging – From AOL’s AIM to Yahoo! Messenger and from the classic ICQ to Google Talk, there are a host of IM tools available for Smartphone us.
Skype – Free Skype to Skype calls on iPhones and they’ve got versions for other devices too

Because Smartphones usually come with a GPS chip built-in, “location based services” are supposedly the next big thing in Smartphone apps. That means your phone can tell an application somewhere in the Internet ether where you are so that app can deliver just-in-time and just-at-the-right-place information to you. You could, say, drive up to a prospective client’s office while the most current, news of the day, prospect intelligence is beamed to your Smartphone as you enter the parking lot.

Who Will Step Up?

Maybe there are too many apps and too much technology for professionals to tackle and too little time to figure it all out? “This will continue to evolve rapidly as applications and devices develop – with the 4G license (next generation, higher capacity, wireless network) requirement to “unlock” devices from the carriers being the next leapfrog event,” said Tim Wise. Opportunity or overload? Perhaps, that’s why there’s not heavier usage of the myriad features and tools available with the current generation of Smartphones? But, if the potential exists for these tools and apps to provide competitive marketing advantage, who will step up to help? It seems that device manufacturers and their partner telecom service providers have a significant opportunity and, perhaps, obligation to support professionals’ realization of their Smartphone’s full potential. Perhaps, the technology teams within professional services firms, alongside the firm’s marketing leadership, should require more app adoption support and training from Smartphone device and service providers? We would like to hear from you about how you and your firm are getting the most business development benefit out of these high-potential technologies.

No comments: